Proposal would up payout for Tuscaloosa Amphitheater

Friday

Jan 3, 2014 at 11:00 PMJan 4, 2014 at 12:07 AM

Although the Tuscaloosa Amphitheater may have experienced its first financial deficit for a concert season, Mayor Walt Maddox is endorsing a contract extension — and raise — for Red Mountain Entertainment of Birmingham, the company hired to bring acts to the music venue.

By Jason MortonStaff Writer | The Tuscaloosa News

Although the Tuscaloosa Amphitheater may have experienced its first financial deficit for a concert season, Mayor Walt Maddox is endorsing a contract extension — and raise — for Red Mountain Entertainment of Birmingham, the company hired to bring acts to the music venue.According to data compiled by the city’s Finance Department, the events at the Tuscaloosa Amphitheater generated $852,380 in fiscal year 2012-13.While this is the most money the venue has made since it opened, it also mounted expenses of $905,783.If these numbers hold up in an audit, which will be performed before the amphitheater’s fiscal 2012-13 financial performance is finalized, that would amount to a deficit of $53,403.In contrast, the amphitheater’s revenues exceeded expenses by more than $113,000 for its first two years of operation.City officials attribute the shortfall mainly to the losses taken on the Gotye and Bob Dylan concerts, but they also said these figures do not include the overall economic effect the amphitheater concerts have on the surrounding businesses, as well as the tax revenue generated from those transactions.The mayor said last year’s concert season organized by Red Mountain brought more than 90,000 people to the various shows — from John Mayer to R. Kelly — and many of them were from out of town.And with the negotiations between Red Mountain and an array of recording artists now ongoing for the 2014 concert season, Maddox said the popularity of the prospective acts stands to bring even more people to Tuscaloosa.“Basically,” Maddox said, “they’re earning their keep.”That’s why he supports the approval of a renegotiated contract with Red Mountain Entertainment that goes before the City Council on Tuesday.The city’s current contract with Red Mountain doesn’t expire until the end of 2014, but city attorneys said the renegotiation was recently completed to make sure there was no slowdown in the venue’s concert schedule.“Red Mountain is already making offers on shows for fall 2014,” said Grant H. Wilson, the associate city attorney who handled most of the renegotiation dealings with Red Mountain. “We did not want to run into a situation where we needed to be making offers on shows for the (2015) season and we did not have a promoter under contract to provide those services.“Without booked shows, there is no amphitheater, so we felt this issue was far too important not to address sooner rather than later.”Prior to the amphitheater’s opening in 2011, Red Mountain was hired to book, promote and advertise amphitheater events, handle the operation and management of concessions, maintain the venue’s website, procure and maintain sponsorships, provide on-site staffing on nights of concerts, act as first point of contact with the hired talent and handle settlement of fees and wages on concert nights.Under the current contract, the city pays Red Mountain $12,500 per month — a total of $150,000 a year — for these services. Additionally, Red Mountain can earn attendance bonuses and 20 percent commission on sponsorships, which together are capped at $149,000 per year.This makes the total Red Mountain can make from its amphitheater duties a maximum of $299,000 a year.The proposed contract, which was approved last month by the council’s Public Projects Committee, increases Red Mountain’s maximum annual earnings off amphitheater activities to $359,000.This includes an increase in its monthly fee to $15,000 per month — $180,000 per year — and raises the bonus and commission cap to $179,000.The new contract is for three years with a potential extension of two years.Maddox said the revenue increase for Red Mountain is deserved because the promoter has exceeded every expectation city officials had for the early years of the venue.“Without their connections in the business, I doubt we’d have been able to have the success that we’ve had,” Maddox said. “What we pay Red Mountain pales in comparison to what we would lose if we did not have them servicing the amphitheater.”